For at least a century, governments have tried to urbanise their nations. Communist states sought to drag people out of what Marx and Engels called their "rural idiocy". Capitalist governments – Mahatir Mohammed's administration in Malaysia is a good example – tried to persuade and bully indigenous people into leaving the land (which then became available for exploitation) and move to the cities to join the consumer economy. Urbanisation was equated with progress and modernity.

In a few nations such as Britain there is a significant middle-class flight to the countryside, while in most places, as agro-industry replaces subsistence farming, as local marketing networks collapse and ecosystems fail, the countryside is emptying out and the cities are bulging. In 2007 the balance of the world's population tipped from rural to urban.

It's not all push. An ethnographer I know who worked among peasant communities in the Amazon found that many of the people he met were obsessed by the idea of moving to the cities. In view of the hellish nature of many Brazilian favelas – especially in the booming Amazonian towns – he wanted to know why. "You have a wonderful life here: the rivers are teeming with fish, your gardens are crammed with food, you work an hour or two a day to meet your needs. You can't read or write: if you move to the city, you'll have to beg or steal or sell your body to survive," he pointed out. "What you say is probably true," they answered, "but in the city you can dream."

The result of these factors, in combination with population growth, is that in many cities the strain on both infrastructure (housing, water, sewerage, transport, electricity supply) and the quality of life (community, security, open spaces, air quality) is becoming unbearable. The New South Wales government in Australia – which has announced a $7000 incentive for residents to move out of Sydney – is not the first to pay residents to leave a city. At the beginning of the 20th century, for example, the Japanese government, perceiving the nation to be overcrowded, paid people in both Tokyo and the countryside to emigrate to Brazil. In the 1980s Suharto's government in Indonesia, with the help of the World Bank, both forced and subsidised a massive emigration from Jakarta to the outer islands. But it could be a sign of mass movements to come.

The environmental consequences depend on where you are. In the rich nations, urban living tends to have smaller impacts than rural living. Public transport requires a certain population density to be economically viable: otherwise people are forced to use their cars. The more widely distributed people are, the greater the resources required to provide their services. Most of the houses which, being off the gas grid, still use coal or heating oil in the UK are in the countryside.

But in poorer countries, where most rural people consume and travel very little, the relationship is often reversed. Only when they move to towns and cities do the poor come to rely on fossil fuels and join the consumer economy, albeit often at a very low level.

In countries such as Australia, the US, Canada, Spain and Italy, weak planning has ensured that the distinction between town and countryside is blurred. Here you can find the worst of both worlds: a wildly unsustainable, disagregated urban nightmare, in which infrastructure is stretched across sprawling suburbs, people have no choice but to drive, and anonymous dormitory estates seem perfectly designed to generate alienation and anomie.

Sydney is not as bad in this respect as Brisbane, Perth and Adelaide, whose sprawl and low urban densities beggar belief, but the problems it now faces are the result of catastrophic planning failures. Without policies to keep cities compact and urban densities high, they will begin to fail all over the world: logistically, socially and economically. Remember that, whenever anyone argues that we should weaken the planning laws to stimulate the economy.